Vettas, Nikolaos - C.E.P.R. Discussion Papers - 1999
quality of their products. Firms first choose their locations (or product characteristics) and then compete in prices. Under … full information, it is shown that, whereas the low-quality firm prefers to locate as far as possible from its competitor …, the same is not true for the high-quality firm, unless the quality difference is small enough. The paper then suggests an …